From the following information calculate Gross Profit Ratio, Stock Turnover Ratio and Debtors Turnover Ratio.
Rs
Sales
3,00,000
Cost of Gods Sold
2,40,000
Closing Stock
62,000
Gross Profit
60,000
Opening Stock
58,000
Debtors
32,000
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Cost of Goods Sold is Rs 1,50,000. Operating expenses are Rs 60,000. Sales is Rs 2,60,000 and Sales Return is Rs 10,000. Calculate Operating Ratio.
From the following, calculate (a) Debt Equity Ratio (b) Total Assets to Debt Ratio (c) Proprietary Ratio.
Equity Share Capital
75,000
Preference Share Capital
25,000
General Reserve
50,000
Accumulated Profits
30,000
Debentures
Sundry Creditors
40,000
Outstanding Expenses
10,000
Preliminary Expenses to be written-off
5,000
The following is the summerised Profit and Loss account and the Balance Sheet of Nigam Limited for the year ended March 31, 2007 :
Expenses/Losses
Amount
Revenue/Gains
4,00,000
Purchases
2,00,000
Direct Expenses
16,000
1,94,000
4,60,000
Salary
48,000
Loss on Sale of Furniture
6,000
Net Profit
1,40,000
Balance Sheet of Nigam Limited as on March 31, 2007
Liabilities
Assets
Profit and Loss
Stock
Creditors
1,90,000
Land
Cash
70,000
1,00,000
6,00,000
Calculate:
(i) Quick Ratio
(ii) Stock Turnover Ratio
(iii) Return on Investment
The following Balance Sheet and other information, calculate following ratios:
(i) Debt Equity Ratio (ii) Working Capital Turnover Ratio (iii) Debtors Turnover Ratio
80,000
Preliminary Expenses
20,000
1,20,000
Loan @15%
Bills Payable
Bills Receivables
Share Capital
Fixed Assets
3,60,000
7,40,000
You are able to collect the following information about a company for two years:
2004
2005
Book Debts on Apr. 01
5,00,000
Book Debts on Mar. 30
5,60,000
Stock in trade on Mar. 31
9,00,000
Sales (at gross profit of 25%)
24,00,000
Calculate Stock Turnover Ratio and Debtor Turnover Ratio if in the year 2004 stock in trade increased by Rs 2,00,000.
A trading firm's average stock is Rs 20,000 (cost). If the stock turnover ratio is 8 times and the firm sells goods at a profit of 20% on sale, ascertain the profit of the firm.
Calculate Stock Turnover Ratio from the data given below:
Stock at the beginning of the year
Stock at the end of the year
Carriage
2,500
Calculate Stock Turnover Ratio if:
Opening Stock is Rs 76,250, Closing Stock is 98,500, Sales is Rs 5,20,000, Sales Return is Rs 20,000, Purchases is Rs 3,22,250.
Compute Gross Profit Ratio, Working Capital Turnover Ratio, Debt Equity Ratio and Proprietary Ratio from the following information:
Paid-up Capital
Current Assets
Net Sales
10,00,000
13% Debentures
Current Liability
2,80,000
Cost of Goods Sold
From the following information calculate:
(i) Gross Profit Ratio (ii) Inventory Turnover Ratio (iii) Current Ratio (iv) Liquid Ratio (v) Net Profit Ratio (vi) Working capital Ratio:
25,20,000
Cast of Sales
19,20,000
Long-term Debts
Average Inventory
8,00,000
7,60,000
14,40,000
Current Liabilities
Net Profit before Interest and Tax
Calculate following ratios from the following information:
(i) Current ratio (ii) Acid test ratio (iii) Operating Ratio (iv) Gross Profit Ratio
35,000
17,500
15,000
Operating Expenses
Compute Stock Turnover Ratio from the following information:
Excess of Closing Stock over Opening Stock
Calculate debt equity ratio from the following information:
Total Assets
15,00,000
Total Debts
12,00,000
Handa Ltd.has stock of Rs 20,000. Total liquid assets are Rs 1,00,000 and quick ratio is 2:1. Calculate current ratio.
Current liabilities of a company are Rs 75,000. If current ratio is 4:1 and liquid ratio is 1:1, calculate value of current assets, liquid assets and stock.
Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the stock is 36,000, calculate current liabilities and current assets.
Current Ratio is 3:5. Working Capital is Rs 9,00,000. Calculate the amount of Current Assets and Current Liabilities.
Following is the Balance Sheet of Title Machine Ltd. as on March 31, 2006.
Amount Rs
24,000
Buildings
45,000
8% Debentures
9,000
12,000
Bank Overdraft
Cash in Hand
2,280
Creditor
23,400
Prepaid Expenses
720
Provision for Taxation
600
69,000
Calculate Current Ratio and Liquid Ratio.
Following is the Balance Sheet of Rohit and Co. as on March 31, 2006
1,53,000
Reserves
12,500
55,800
22,500
28,800
Bills Payables
18,000
Cash at Bank
59,400
54,000
2,97,000
Calculate Current Ratio
The current ratio provides a better measure of overall liquidity only when a firm's inventory cannot easily be converted into cash. If inventory is liquid, the quick ratio is a preferred measure of overall liquidity. Explain.
The average age of inventory is viewed as the average length of time inventory is held by the firm or as the average number of day's sales in inventory. Explain.
Financial ratio analysis is conducted by four groups of analysts: managers, equity investors, long-term creditors, and short-term creditors. What is the primary emphasis of each of these groups in evaluating ratios?
The liquidity of a business firm is measured by its ability to satisfy its long-term obligations as they become due? Comment.
What are important profitability ratios? How are they worked out?
Why would the inventory turnover ratio be more important when analysing a grocery store than an insurance company?
How would you study the solvency position of the firm?
What relationships will be established to study:
a. Inventory Turnover
b. Debtor Turnover
c. Payables Turnover
d. Working Capital Turnover.
What are liquidity ratios? Discuss the importance of current and liquid ratio.
What are the various types of ratios?
Who are the users of financial ratio analysis? Explain the significance of ratio analysis to them?
What do you mean by Ratio Analysis?
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